How do I change the MTL File to an actual image?
A MTL file is just a material definition. It doesn't contain image data. See here for further (all) details about the MTL file format: http://paulbourke.net/dataformats/mtl/

If you're using OBJ files, you need three things:


the model data as OBJ, contains vertices, faces, smoothing groups and texture coordinates, etc.
the texture(s) (any image format, e.g. PNG)
the material library file (which is referenced in your OBJ file)


See also:


the blender manual about the OBJ file format 
this question for OBJ exporting options in Blender